The Office of Personnel Management kicked off its 2004 Federal Workforce Conference in Baltimore Wednesday with a spirited defense of civil service personnel reforms that will soon shift more than 750,000 civilian employees out of the General Schedule and into pay-for-performance systems.

In the conference's opening address, Ronald Sanders, OPM's associate director for human resources management, said the changes were spurred by Sept. 11 and the realization that government must have personnel systems that are tailored to individual agency needs and that maximize flexibility to manage employees. At the same time, he said, they must preserve merit system principles.

The approach that the Homeland Security Department took, which involved a year's worth of discussions with employee union leaders, "is a perfect case study in preserving those ideals on the one hand and maximizing flexibility on the other," Sanders said. DHS, along with the Defense Department, received congressional approval to design new personnel systems in 2002, and 2003, respectively.

In an afternoon session at the Baltimore Convention Center, officials from the two departments fended off charges from Brian DeWyngaert, executive assistant to the president of the American Federation of Government Employees, that the new systems are "anti-employee" and will send the departments into turmoil at a time when they are more vital than ever to fight terrorism.

DeWyngaert argued that federal employees understand and trust the General Schedule system. By contrast, he said, pay-for-performance systems provide no guarantee that any employee would ever receive a pay raise. "Why do we want to go to a pay system where everything is secretive?" he asked.

After opening its proposal to public comment in February, DeWyngaert said Homeland Security officials ignored the fact that a majority of respondents criticized its plan. Further, DeWyngaert said, the proposal would "take away what little means employees have of providing input" because it would limit the scope of union-management bargaining. Under its pay-for-performance plan, DHS will no longer negotiate with its unions on issues deemed to be "core management rights," such as the deployment of personnel, work assignments and the use of new technology. At the same time, he said, Defense has refused to share with employee unions any details of its plans.

But Mary Lacey, the program executive officer charged with overseeing the development of Defense's National Security Personnel System, and Melissa Allen, senior adviser for human resources at Homeland Security, painted a picture of intensive employee-management collaboration and thoughtful management deliberation based on the new systems' designs.

Lacey said initially Defense officials "went blindly down the path of writing regulations" before consulting employees and Congress. But after an "uproar" of disapproval, Defense pulled back, and has since set up a more thoughtful process. In recent weeks, the Pentagon has held focus groups and town hall meetings at installations worldwide to gather input on the new system. At the same time, about 120 employees have been assigned to working groups to develop options for the different parts of the new system, from pay and labor relations to employee discipline. "We are conducting the process in a significantly more open way than when we started," she said.

Still, Lacey explained, "We feel strongly that today's system is inadequate," noting that hiring takes too long, outstanding performers are paid the same as average workers and managers are often forced to assign tasks to uniformed military personnel because civilian personnel rules are so difficult to navigate.

She acknowledged that Defense doesn't see its union-management meetings as "bargaining sessions," but said that union concerns, along with those of nonunionized employees, are being considered.

Defense plans to introduce the proposed regulations this winter and launch the pay-for-performance system for an initial group of 10,000 to 50,000 employees representing a broad cross section of the department's workforce next summer. Additional employees will be rolled into the system each year until all Defense workers fall under the new rules.

Allen explained the widely praised design process that Homeland Security underwent last year, noting that the department had consulted thousands of private and public sector stakeholders. The comments on the proposed regulations, she agreed, were overwhelmingly negative and are being evaluated as DHS Secretary Tom Ridge and Office of Personnel Management Director Kay Coles James prepare to announce final rules later this year. Still, she acknowledged, "to say we are in agreement [with DHS unions] would be a stretch of the imagination."

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